Some FUN-based Market Observations

The FUN show is clearly one of the two major market indicators. Symbolically, it is the beginning of a New Coin Year but it is, most of all, a huge economic event with hundreds of millions of dollars changing hands. For me, a good FUN show is a clear indicator that the first quarter—if not half—of the coin year will be strong.

This was one of the strangest FUN shows I can recall. I was constantly busy and there were people at my table from the beginning of dealer set-up on Wednesday until I was packing up to go home on Friday afternoon. It was one of the easiest selling shows I can ever recall having, and my wholesale numbers were well above average. But it was also a hugely difficult show at which to buy. If, like me, you were a dealer who buys choice, cool, rare coins there were slim pickings at best. I was able to buy a number of great coins (some of which are now posted on my website; others never made it back from Orlando) but I knew as early as Thursday morning that I was going to fall well short of my numeric goals in terms of coins bought.

Clearly, one of the facts of life about major coin shows (FUN and ANA in particular) is that the huge auctions that surround them have a profound and significant impact. I talked to numerous well-heeled collectors who roamed the floor but stated that they were “waiting until after the auction” to make purchasing decisions. Considering that the major segment of the auction was Thursday night, this left a short window of opportunity for them to buy coins.

Heritage should be credited for producing one of the all-time great FUN auctions, and although I don’t know exactly what their final numbers were, I am assuming the FUN sale set an all-time record, given that Platinum Night alone did north of $50 million dollars.

I spent a lot of money at the Heritage auction(s) but didn’t buy a lot of coins; at least not in terms of useful, “bread and butter” coins that I could turn around and immediately place into inventory. Some of the dates that I will always try to purchase were represented by coins I just didn’t like, while other areas of the market seem to have quickly jumped to new levels with which I’m not yet comfortable.

Some observations from the auction are in order:

1. Rarity is clearly in vogue right now and even off-quality examples of truly rare issues are commanding huge premiums. As an example, an NGC EF45 1864-S brought just a shade under $100,000. And other seldom-seen eagles such as the 1863, 1873, and 1876 brought what I thought were enormous prices based on their actual quality.
2. There were a number of really exceptional coins in the auction and they brought exceptional prices, as they should have. My two personal favorites were David Akers’ personal 1826 half eagle graded MS66 by PCGS which brought $763,750 (a price which I thought was strong but not at all outrageous), and the Eliasberg Proof 1889 double eagle, graded PR65 by PCGS but in an old green holder and looking more like a PR67 Deep Cameo by today’s standards, which sold for an extremely strong $352,500.
3. Speaking of exceptional, the market for Liberty Head double eagles continues to rage on. The FUN sale had a deep offering with coins ranging from off-quality and very choice for the grade and issue. But it almost didn’t matter what the coin looked like as prices were strong across the board. Type One O mints? Very strong. CC’s? Very strong, although the nice PCGS AU50 1870-CC at $329,000 seemed like a much better value than the really unappealing PCGS EF45 at $282,000. Civil War dates? Crazy strong including a record-for-the-grade prices on the 1861-S in PCGS MS62, the 1863 in PCGS AU58, and the PCGS MS62 1864. I was taken aback by prices for the Big Five late date Type Three issues. An 1881 in PCGS AU58 sold for $111,625, an 1882 in NGC AU58 realized $94,000 and perhaps most incredibly, a tooled no grade 1886—the ultimate “what a shame” coin—brought a staggering $129,250. No grades in general did very well in this sale, by the way, but that’s another story.
4. The best values in the 19^th century series are clearly in the Liberty Head half eagle series. Prices on double eagles have made this series the playground of the 1%, and the eagle series has gone from neglected to flavor of the year (smart buys still can be made in this series but proceed with caution!). Even though there were some price records set in the FUN sale for finally-recognized date rarities such as the 1863 and 1865, there are still many dates in the $2,500-15,000 range which seem very fairly priced relative to their rarity. Given the great prices that schlocky rare date coins brought in the auction, I’d like to think that DWN-quality examples are even better values.

A few other non-auction observations, based on looking at dealer’s inventories: nice quality early gold is still in very short supply, Dahlonega gold is literally nowhere to be seen (I’m embarrassed to admit this but I came home with exactly two new D mint coins…two! From the FUN show!!! How is this possible?!?), CAC premiums are really noticeable - especially from sellers who don’t typically handle nice coins, and if I had listened to myself and bought Civil War gold coins when I predicted they’d be the Next Big Thing I’d have made myself a tidy little profit.

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Contact Doug Winter at (214) 675-9897 or by email at dwn@ont.com.

Three Great New Orleans Coins

I’ve heard it said many times that, “All the great coins can only be found at auction.”

As my recent experience at the 2013 FUN show in Orlando will prove, this is far from the truth. At this show—and at most other major conventions—I am able to purchase great coins via private treaty from dealers and collectors. Many of these are fresh as the proverbial daisy having either never appeared at auction before or, if they have, many years ago.

As a dealer who specializes in choice and rare 18th and 19th century United States gold coins, I have a special place in my heart for important coins from the Eliasberg sale. Held in October 1982 by Bowers and Ruddy, this was arguably the single greatest collection of gold coins sold in the modern era. Unlike many other great gold sales, the Eliasberg pedigree is synonymous with high quality and, in most cases, when I see a coin is ex: Eliasberg, I get the mental picture of a very high end piece for the date.

On the first day of the FUN show, I got a text message from a dealer who I have known for many years and who I do business with from time to time. He told me to come to his table to look at a group of coins and I went there quickly as I know this dealer isn’t someone who will waste my time with marginal stuff.

When he showed me the small group of coins, my heart skipped a beat as the group contained a number of New Orleans gold coins that I immediate recognized as being from the famous Eliasberg sale. One of these coins was something that I had been chasing since the mid-1990’s. That was the good news. The bad news was that this dealer is one of the very smartest guys in the coin business and he is not exactly known for giving things away. I knew I had to buy these coins; it was just a question of how much would I have to pay.

I’m going to discuss these coins in some detail. Since they are already sold, I’m not going to reveal what I paid for them but I will discuss how I figured values for each.

1842-O Half Eagle, Graded MS63 by NGC/CAC approved

The New Orleans mint produced a total 16 Liberty Head half eagles from 1840 to 1894, in two different designs. The No Motto coins, issued from 1840 to 1857, tend to be scarcer than their counterparts from Charlotte and Dahlonega and nearly all are very rare in Uncirculated.

The 1842-O is the second rarest half eagle from this mint. Of the 16,400 struck there are around five or six dozen known. When available, the typical 1842-O is very well-worn with most in the VF-EF range. In About Uncirculated, the 1842-O half eagle is quite rare with probably less than a dozen properly graded pieces known. But in Uncirculated, this date is of the highest rarity.

There are exactly three 1842-O half eagles known in Uncirculated: an NGC MS63 (the present coin), a PCGS MS61, and an NGC MS60. Remarkably, I have now sold all three of these coins, meaning that there are no longer any Uncirculated pieces available.

Of the three known in Uncirculated, this example is the finest and it has a wonderful pedigree. It was last sold in Stack’s May 1995 auction for $31,900 as part of the famous collection of No Motto half eagles owned by the late dealer Ed Milas. It was earlier in the Eliasberg collection where it brought a whopping $3,850 in October 1982. Eliasberg obtained the coin from the Clapp collection and it was first recorded in the George Earle collection sale of June 1912, conducted by Henry Chapman.

A number of things appealed to me about this coin as I made the decision to purchase it. The first was that I would be able to sell it. I had a specific collector in mind but even if he passed on it, I had enough confidence in the coin to buy it “on spec.” Probably even more important was that I loved the coin when I first saw it two decades ago and I loved it even more when it reappeared. It was still in the same old NGC “fatty” holder in which it appeared in the 1995 Milas sale and, even without having access to that catalog, I knew that it had not been messed with.

As you can see from the photo above, the most remarkable thing about this coin is its color. Both the obverse and reverse have splendid rich orange-gold and coppery color. If you don’t know what “real” color on a gold coin of this era is supposed to look like (and many collectors, I’m afraid, do not…) take a careful look at the toning pattern and the hues on this coin. Note how the color is perfectly blended and how it lays on the surfaces. Note how it doesn’t suddenly become darker exactly where there is a mark (as on coin where color is applied to masks flaws). And note the richness and the “purity” of the color.

Having sold the other two Mint State 1842-O half eagles, I had a good idea of the “base line” value for a high grade 1842-O. Knowing this, I factored in the amazing appearance of the coin, its pedigree and its numismatic significance as the finest known example of a truly rare coin. This was an easy decision for me to make and I doubt that there will be many New Orleans half eagles that I buy in 2013 with more panache than the Eliasberg 1842-O half eagle.

1844-O Half Eagle, Graded MS64 by NGC/CAC Approved

By the standards of New Orleans No Motto half eagles, the 1844-O is a “common” coin. It is plentiful in circulated grades and available, from time to time, in the lower Uncirculated grades. There are an estimated two to three dozen in Mint State with most in the MS60 to MS62 range. In MS63 the 1844-O is rare and it is very rare in MS64 with around five or six known to me. There is a single Gem known (graded MS65 by PCGS) and it is ex Bass II: 937 where it sold for a reasonable $34,500. A few years ago, it was re-offered to me by a Midwestern dealer for a six-figure sum.

In my opinion, this NGC MS64 has the best pedigree of any 1844-O half eagle. It was last sold as Lot 457 in Stack’s Milas collection in May 1995 where it brought $20,900. Before this, it was Lot 434 in the October 1982 Eliasberg sale, where it brought $4,620. It was earlier in the Clapp collection and it is not pedigreed prior to be obtained by the Clapp family.

As with the 1842-O half eagle described above, this coin was in the same old NGC “fatty” holder in which it had resided when offered in the May 1995 Milas sale. It was a degree of comfort to me to know that it hadn’t changed in appearance since then.

This coin had a very different look than the 1842-O. Where the first half eagle was all about its color, this 1844-O was more about its blazing mint luster. Unlike some of the high grade 1844-O half eagles which I have handled, this piece was very frosty in texture; most of the others are grainier and present a different appearance. The Milas/Eliasberg 1844-O half eagle had lovely light to medium yellow-gold color and really the only thing keeping it from an MS65 grade was a few small marks in the left obverse field.

While the purchase of the 1842-O half eagle was a no-brainer, I had to think a little bit harder about this coin. I generally don’t care for common dates in uncommon grades. But how often do you see any No Motto half eagle in real MS64, let alone one from New Orleans? So I thought for another two or three seconds…then happily bought the coin.

1841-O Eagle, Graded AU58 by PCGS/CAC approved

Every dealer and many collectors have coins that are White Whales. If you don’t get that Ahab-ian reference, I mean an elusive coin that you are literally on a quest to buy, even if it takes years to track down. And when it becomes available…Ahab-ian things can and will happen.

While still not that widely known, the 1841-O eagle is among the most numismatically significant gold coins from the New Orleans mint. It is the first eagle struck at this mint and only 2,500 were made. It would remain the largest coin struck at a southern branch mint until 1850, when the double eagle denomination was introduced to New Orleans.

Of the 21 No Motto eagles from New Orleans, the 1841-O is the second rarest in overall rarity with around 60-70 known. This is an issue which was placed immediately into circulation and it saw hard use. When available, an 1841-O is likely to grade VF and a decent-looking EF coin is very scarce. In higher grades, I regard this issue as the single rarest eagle from New Orleans. It is unknown in Uncirculated and I believe that there are only two properly graded AU55 and finer pieces known: a PCGS AU55 in a California collection which I sold in 2007 and the present example. Having now owned both of them, I can pretty boldly pronounce that the PCGS AU58 is clearly the finest known.

If you have ever seen a typical quality 1841-O eagle, you are aware that this date just doesn’t have very good eye appeal. Most are very heavily worn and extensively abraded. More significantly, most have been processed and stripped to the point where they have zero original luster or surfaces. And that fact makes the existence of this choice 1841-O so miraculous.

While it is “only” graded AU58 by PCGS, I feel that this coin is actually Uncirculated as it has no real wear. Because of the fact that it is semi-prooflike, the surfaces appear a bit more abraded than they are in person. When I first saw this coin two decades ago, I thought it was a “baggy Unc” and I still believe this today; probably even more so.

The pedigree of this 1841-O is impressive. It was last sold as Lot 6238 in the Heritage 10/95 auction as part of Warren Miller’s collection (a set of Liberty Head eagles that is still probably the finest ever assembled). It was earlier sold as Lot 934 in Stack’s 10/86 auction and before this it was Lot 665 in the Eliasberg sale where it brought $4,400. Eliasberg bought it as part of the Clapp collection in 1942 and it was earlier purchased from the Massachusetts dealer Elmer Sears in 1920.

Of the three coins, this was the hardest to buy as it was many multiples more expensive than any other example of this date which has ever sold. But it was the coin I wanted the most. So how did I justify paying what I did?

In the last few years, the 1883-O has become the coin du jour of all New Orleans eagles. At least two AU58’s have sold for over $100,000 and this is a coin that is clearly more available in comparably higher grades than the 1841-O. I asked myself: “Self, what coin would you rather have: an AU58 1841-O eagle or an 1883-O eagle?” The answer was almost immediate: the 1841-O is an issue which I think has more upside than the 1883-O and it is an issue that is rarer; despite the very low mintage for the latter. I sucked it up, wrote a check and haven’t looked back since…

So how was your FUN show? Mine was pretty incredible actually. I was able to buy many, many impressive coins there but the three which will stand in my memory are these wonderful New Orleans pieces from the Eliasberg. This is what makes being a coin dealer fun and why I still look forward to major coin shows even after all the years I’ve spent going to them.

For more information on great New Orleans gold coins, Eliasberg pedigree gold coins or cool coins in general, please feel free to contact me by email at dwn@ont.com.

Factors That Determine a Good Coin Show

I hate to think how much time I’ve spent at coin shows. As an example, I’ve been going to Long Beach for 24 years now. Long Beach shows are held three times a year (that’s 72 Long Beach shows) and I’m there an average of three nights. Which adds up to a total of at least 216 days spent at Long Beach shows or, gulp, nearly three-quarters of a year. There are clearly good coins shows and bad coin shows. What are some of the factors that make a coin show good and why do some thrive while others languish or die?

1. Location: I live in the far upper left corner of the United States so every location is tough for me to get to. But I can endure endless plane flights to Orlando for the FUN show or to Baltimore (two or three times a year) because these are first-rate shows where I do a lot of business. A good coin show needs to be in a heavily populated area and in an area that is regarded as being “good” for coins. It is hard to explain why a wealthy, vibrant city like San Francisco is not a good coin town but it is pretty easy to venture a guess that St. Louis (a site of numerous conventions) is a really bad coin town. New York would seem to be a great location for coin shows but the price of putting on a good show in Manhattan makes it prohibitive for most promoters. I’ve often wondered why there aren’t more shows in Chicago—it’s in the center of the country and home to many collectors but for whatever reason there hasn’t been a major show in downtown Chicago for years.

2. Facilities: I don’t even want to attempt to figure out how many days of my life have been in spent in convention centers across the United States. After a while, the convention center in Pittsburgh seems to blend into the facility in Kansas City which appears to look like the building in Denver. But I will say that a nice, convenient location sure beats spending a few days in the basement of some ratty motel. I can remember coin shows back in the 1980’s that were held in underground garages and others that I half expected my lunch to be carried off by vermin. Unfortunately, a nice facility does not guarantee a good show. The Palm Beach show which died a fast death last year was held in a beautiful new facility in a great city. The bad news was that the closest hotel to this facility was a long walk and just try to get a flight from Portland, Oregon to Palm Beach, Florida…

3. Timing/Conflicts: One of the reasons why everyone loves the FUN show is that it’s held in a (usually) sunny climate in a month that’s traditionally gloomy and awful if you live in much of the non-tropical parts of the country. If the FUN show were held in Boston in January, I don’t think it would quite as popular. Another important factor to consider about a show is its conflicts with the traditional coin circuit. If I were starting a brand new show I would make certain it isn’t competing against a major convention and I would also be sure that it wasn’t being held a week or two after a major show. I suffered from a major case of “show burnout” in 2005 and 2006 and the conventions that I decided not to attend were the ones held too soon after major shows.

4. Public Attendance: This is less of a factor for me today than it might have been in the past. Many of my clients do not attend coin shows and prefer to do business with me via private treaty. And with just a few exceptions, I look at coin shows as opportunities for me to buy and sell coins with dealers. The exceptions to this are the major shows like FUN, ANA, Central States and Baltimore. I typically meet a number of collectors at these shows and I tend to stay longer, in an attempt to be “retail friendly.” The bottom line is that a show with good retail attendance has a much better buzz than a show that seems like a morgue and this translates to a better overall atmosphere.

5. Major Auctions: Every major show has a major auction which is held in conjunction with it. You can have a major auction without a coin show attached to it but you certainly can not have a major show with an auction to bring in collectors. One of the problems that new shows face is the difficulty in getting an auction company to commit to holding a major auction. At this point, the only big show that does not have an auction which I consider first-rate is Baltimore but even this seems to be changing as Bowers and Merena is attracting more interesting and better consignments. At other shows, like FUN or ANA, the problem tends to be too many auctions and not enough time to get these auctions done.

6. Grading Services In Attendance: If PCGS and NGC aren’t at a coin show, no fresh coins get made and the show is a waste of time. This may not necessarily be the case for a collector but for a dealer it goes without saying that “if the coins aren’t being made than the dealers aren’t getting paid.” I can’t think of a single coin show that I’ve attended in the past few years that was worthwhile when one or both of the major services weren’t in attendance.

7. Miscellaneous Factors: I can think of a few other factors that separate the wheat from the chaff as far as shows go. If the best hotel option is a Motel Six, then I’m probably not going to be anxious to get a table at a show. The same goes for the ability to fly into a town. If I’m traveling with coins and I have to change flights three times or fly a tiny commuter plane, I’m either going to come without coins or, better yet, not go at all. Safety is always a factor with me. I do not like going to shows in downtown Detroit or St. Louis because, in all honesty, I don’t feel safe. By the same token, I’ve always thought that suburban venues were sterile and boring and it’s sad when your best dining option after a hard day’s work is Applebee’s.

In summary, I think there are too many coin shows and I, for one, have decided that I will not be attending as many of them in 2007 as I did in 2005 or 2006. I’m not certain if other dealers will do the same (everyone complains about there being too many but everyone is too greedy to not go to every major show) but I predict that whenever the market gets soft, some of the shows that seem healthy now will either contract or fade away altogether.